The most effective tax strategy for your business could create a complete shift in how you conduct operations, to take charge of your taxes you must implement the right plan. This could be your year, as the billionaire Warren Buffet said, “You only have to do a very few things right in your life so long as you don’t do too many things wrong.”
As the owner, you have enough on your plate, tax rules are complex but if you take time to understand them your business will benefit. If you’re just getting started, this is what you need to know about the essentials of tax planning, if you’re a veteran this article is for you.
A good plan violently executed now is better than
a perfect plan executed next week. George S. Patton
You will pay as much in taxes as you don’t plan on paying, if you plan, you have more control over the portion of your income considered taxable. Everything we do requires a little risk. When you leave your home in the morning, it is perilous. Most of the people who will die today, left their house this morning, I guarantee not one of them thought they wouldn’t return.
Yet think about how much of us gamble in this way. The more you understand about the risk you’re accepting, the less likely you are to do something drastic. When we study history, we can adopt the top tax strategies used by our predecessors by applying and shifting them to today. If reading a few books can help entrepreneurs save much money on taxes, why doesn’t everyone do it?
What we don’t know about taxes
Most people don’t understand taxes, that’s why we don’t take advantage of it, and the opportunities pass us. It’s what we don’t know about taxes that hurt us the most. Why doesn’t it work when we tax the rich? The tax system isn’t fair. The larger tax burden falls on employees, not the rich. While the investments wealthy people take advantage of, have a much lower tax bracket. Taxing the rich creates more taxes, could raise new concerns about employment and does nothing to lessen the tax burden on employees.
It’s for these reasons that accounting is a necessity, not a luxury, it is a service that can keep your business thriving.
The wealthy are the most productive people in our society. That’s how most of them accumulated their wealth if we start holding the productive people to a higher standard, what will stop them from leaving? They have the means and money to create a lifestyle somewhere else. It’s in our best interest to find a separate solution.
It’s where you spend your time that controls much of where your life is directed, what you give your attention to expands itself within you. These aren’t commonly known because they dive deep into the understanding of human behavior, psychology, and history as a whole.
The difference between knowing and understanding is how you use the knowledge. One is completing your taxes regularly while understanding when we plan for taxes across multiple years. Your life is going in one direction. Let’s plan for the best possible one.
Own a business
The apparent solution to plan for the most effective tax strategy is to own a business. Your business will be eligible for more deductions and credits than an individual. If you already own a business, speaking with a tax professional about a tax strategy is your next step to find what best suits your needs.
If you own one successful business, why not start another, then you would have two companies both in support of each other, saving you money. Start doing for yourself what you allow others to do for you; find a way to serve people; there is no shortage of people in need.
Don’t plan for today, prepare for tomorrow, taxes aren’t a sprint it’s a marathon. On the day of a marathon, you can tell the difference between the amateurs and the professionals. The beginners are chugging water, stretching, and finishing last-minute preparations. Professionals are ready. We know today’s results are impacted yesterday, today we must act.
If you want to make a big dent in your life, become a professional, start a business. Go to work on yourself more than you do anything else. This is how to start the business of your dreams.
The game of business
The reason most people don’t own a business is that they don’t understand the game of business if you never study the rules, it’s not likely you’re getting excited about the game. Business requires accountants, lawyers, sales, and marketing. It would be best if you had a team in the industry. The better your team is, the more likely you are to succeed and thrive in your market.
If you don’t know where to start, try building a high-performance accounting firm, failing big is better than not failing at all. Don’t just plan on trading your job for a business, plan on building something more significant than your job. The problem with most of our journeys is when the enthusiasm dies out, so do we. But everyone that’s in a great relationship knows after the honeymoon phase, the real work starts.
You’re going to experience a rollercoaster of emotions, the better you focus your thoughts and manage your feelings, the fewer bumps you’ll go through. Life is already a rollercoaster, but we’re all playing in the same game, limited time, and we’re trading our time for money. But in the game of business, you have the opportunity to make the rules. You can be in charge.
Taxes and grief
I know you’ve heard of death and taxes, but I prefer to compare taxes and grief. Death is so final that we can’t experience a personal reflection, whereas we see the outcome of our taxes everyone, yet taxes remain unavoidable. Like grief, you can minimize taxes, but a tax avoidance strategy will help you more than avoiding your pain. Legally, there are correct ways to plan tax efficiency, just as we can take steps to heal a broken heart.
You know that couple, the one that always fights, they’re bad for each other, but they keep repeating the same decisions. Those decisions create a pattern, and even if those two split up, they eventually drift to someone who is just as similar. It’s obvious when it’s someone else but not so obvious when it becomes us at the center, every year you allow more and more taken from taxes.
When does the pattern stop?
New tax laws and programs improve society, but at the cost of taxpayer dollars, when we collectively enhance what we pay together, the money has to come from somewhere. Tax deductions give us a way to reduce the burden we carry, and your business can deduct more than an individual can. If you can reduce taxes, excellent, but like grief, you should take care of it in the best way you can, if you can’t handle it, ask for help.
What is the absolute best tax strategy your business can adopt? Remember, a strategy is all that matters, but finding the best one is more complicated than it seems. Asking what the best strategy is, is like asking, “What is the best chess move one can make?” There is no one answer but instead what is best for the person at the time. Likewise, your business needs a personalized strategy, not just based on where you are in life—but adapted to your future goals and where you want to go.
CPA’s are not always up to date on current tax laws. It doesn’t fall within their regular duties unless otherwise specified. You might have a CPA, but what do they do for you? Your CPA is at the frontline to your financial statements if we don’t try to become the best at what we do, what are we spending our time on?
Your CPA should include tax strategy and planning in your services, in order to build lasting wealth, it needs to follow a plan.
If you need help creating one and are located in California, we would love for you to walk into our office in Victorville to create a wealth-building plan. If you look in our area, there are numerous tax specialists, but I guarantee we work with more businesses. We enjoy the experience. At Anguiano Consulting, we can be working with a hundred business owners at any given time. It’s because of our plan and strategy align.
At Anguiano Consulting, we go above and beyond to help our clients build wealth. We believe in growing and continuing our education. We are here to help you succeed.
I don’t want you to panic when you hear the term tax loopholes. A tax loophole means you’re taxed at a lower rate than the regular income tax rate. When you speak with a financial advisor, you’re identifying loopholes your business can take advantage of. These advantages include tax credits, tax deductions, and using the current tax laws to implement tax savings.
If a loophole exists, and it is unfair, it is because we as the tax representatives have not improved on the current tax laws. Laws are voted on and passed, the amount of effort we use to campaign for a vote has as much impact we allow on the law. Abraham Lincoln took it upon himself to study law and educate those who knew less than himself. This was a time when the internet didn’t exist, and we searched for books for information.
It’s not that we don’t understand the laws, the problem is we do little to impact or create new ones and instead focus our attention on complaining about the results. Just as you are the key to influencing your business, no change can occur unless it starts with you.
There are no loopholes that exist with the ability to take action on them. You decide the movement and how if the strategy is followed. I think the term loophole only exists because some of us saw something the rest of the population didn’t, our minds are powerful like that, what I might see as a reality you could define as fantasy.
Don’t wait, be the business owner leading your taxes into the new year while still operating in the old one. Remove and reduce your tax burden by preparing for it ahead of time.
Why do we wait to reach our goals?
The simple answer is indecision, indecision becomes no decision, and no choice is something we still pay for. When we put out goals on the back burner, there is little that would cause the goals to come to the forefront of our mind, they get buried deep inside us and forgotten about.
The best strategy to use for tax reduction is to set goals for your taxes, keep taxes at the forefront of your mind, and think about how you will pay less in taxes. Paying less in taxes has nothing to do with greed, it has to do with intelligence, as Victor Frankl explained.
If suffering can deliberately be avoided but isn’t, it is not virtuous but foolish. If pain cannot be avoided, then it is up to us to generate meaning in our burden.
You can reduce your taxes through legal avenues that have been created by activities which by your own choice are created, then you owe it to your effort to implement a tax strategy. It’s like being in the best shape of your life, but spending your free time on the couch, you have the potential, but it’s sitting there just waiting for someone to use it.
The tax industry requires each of us to calculate how much we owe to the IRS, but when you go to a restaurant, they hand you the bill. No wonder we mess it up. Believe it or not, the most common mistake when filing taxes is an incorrect social security number.
The first income tax in America was created in 1861 during the Civil War to finance the war effort; however, the earliest recorded evidence of a death tax is from Egypt, a 10% tax on property transferred at the time of death in 700 BC. On Dec. 16, 1773, American colonists sent a message to Britain that we would not take taxation sitting down. Taxes aren’t new, but for you, a tax strategy might be, and if it is, you need to speak with us.
Depending on your state and location, you may have to abide by different tax laws. California, for instance, has some of the highest gas tax, state income tax, and state sales tax. It’s human nature to believe these things will get better, but the truth is, there is no magic solution, and over time taxes have gotten worse.
The best strategy to combine with taxes is to operate your own business. If you’re currently working for extra income, you can put that effort into a business. Most people won’t start a business because of the first door. How do I start? If you want to get through that obstacle but can’t send us a new client form, we would be happy to walk you through the process.
If you’re new to the business world and have not implemented a tax strategy, please reach out to us or visit our office located in Victorville, California. At Anguiano Consulting, we help new and existing businesses build and keep their wealth. Long term wealth starts with a plan, perfected by thought, and moved into action.